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Get your taxes done using TurboTax
Hello @uncfooz
Business startup and organization costs are both generally considered capital expenditures; however the IRS does allow you to elect to deduct up to $5000 of business startup and $5000 of organizational costs paid or incurred after 10/22/2004. The IRS requires you to reduce the $5000 deduction by the amount of your total startup or organizational costs that exceed $50,000. Any remaining costs must be amortized.
There are 3 categories of startup costs the IRS considers eligible for tax deductions:
- Creating a trade or business (including investigating the creation or purchase of an active trade/business)
- Preparing the business to open
- Organizational costs
I've listed some helpful links which go into further detail below.
Helpful links:
Publication 535 (2022), Business Expenses
Your guide to small business start up costs and taxes for 2023
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‎October 26, 2023
12:44 PM
1,606 Views